Designing demand for design services

by Greg Branson

The design industry in Australia is still in its infancy compared to other parts of the globe.

The only sophisticated and ongoing research into the industry has focused on graphic design, the largest sector in designer head count and studio numbers.

For the past 8 years IBISWORLD has surveyed graphic design in Australia. There latest findings have some interesting points for studio owners, new start-ups, educators and governments.

Design for growth
The statistics show that:

  1. The industry has a total revenue of $3.9 billion dollars.

  2. There are 8,114 graphic design businesses in Australia.

  3. They are expected have an annual growth of 4.7% from 2011-2016.

  4. 38% of graphic design businesses are in New South Wales, 28% in Victoria and 15% in Queensland. Western Australia has 8%, South Australia 6%, ACT 2% and Tasmania has 1%.

The Studio owner
The IBISWORLD report has some reassuring points for the studio owner.

'Much of the industry's growth is based on the early embrace of digital technology, which increases quality and lowers costs. The forecast economic recovery should cause a resurgence in the advertising design sector.'

IBISWORLD makes the point that packaging design will have a renewal as many manufacturers put of producing new packaging during the GFC, but now need to revamp their product offerings.

The report indicates that there is a growing recognition of graphic design to offer a wide range of competitively priced services involving the internet and other targeted means of communication

Education and Government
The report makes the point that there is an oversupply of graphic designers and comments that some TAFE colleges are cutting back on their courses. The oversupply can be seen in the large number of micro businesses in graphic design. There are usually home based and are largely underemployed. Anecdotal research shows that young design graduates set up a business whilst in college or university and then continue trying to get their own clients whilst seeking full time employment. This type of business probably accounts for half of the 8,144 graphic design businesses listed.

The second issue of oversupply is that many of the young studios are not able to grow to the point that they become viable studios employing other designers. This holds back the industry from growing. This can be seen in the fact that 85% of studios have four or less employees, 12% had five to nine employees  and only 1% have more than 20 employees.

This breakdown has not changed in the decade that the dbc has been tracking the industry. This is in spite of governments pouring tens of millions of dollars into promoting the design industry.

The message here for governments is that they should be targeting the small studios with assistance to grow and move from the 'non-employing' category to 'employing'.

This can be achieved by offering accelerated training in the business of design. This could be effectively accomplished through the establishment of design clusters or incubators where an economy of scale would make the delivery of these services viable.

The federal government through its Enterprise Connect funding has taken an approach that is much more successful. A recent project (Design-in-Business strategy) funded by Enterprise Connect assisted 11 small studios to develop skills and strategies to build their businesses. The success of this was largely due to the involvement of two industry groups; South Eastern Melbourne Manufacturers Alliance and the South Eastern Business Network. These groups had the industry contacts and the foresight to see how design can benefit SMEs.

Future government funding would do better to follow this model where targeted programs can have immediate impact when run in conjunction with industry groups and associations.

The aim is to help small studios become big studios, offer more design services and employ more designers.

Greg Branson 2011